There are two main areas of activity that are referred to as “business modelling”. The first is that set of activities carried out by financial experts, economists, etc. that is concerned with analysing, modelling and predicting the financial performance of a business, business sector or an industry.

The second is all about modelling what a business does, or OUGHT to be doing, in order ensure that it is doing the right things in the most effective and efficient ways possible.

The essential areas to model for a business are:

Business Functions

These are the core activities of any business. A properly built Function Model is a definition of exactly WHAT it is that the business OUGHT to be doing, independent of who does it or how it is done.

The function model should be built before any other models as all they are all based on it.

Data Structure

This defines the elements and structure of the data required to support the Business Functions.

This key model is the one most often omitted by business analysts because, remarkably, very many business analysts cannot do data modelling. This disconnection of data from function during the business analysis stage of projects is a major contribution factor to ineffective databases and poor data quality.

After you have done the Function and Data Models, you can produce the following models, as an when they are useful.

Business Processes

In formal terms, a Business Process defines the order in which Business Functions need to be carried out in response to a specific Trigger, in order to arrive at a predefined outcome. Less formally we could say “Whenever the event X happens we would like to get result Y, what functions do we need to carry out and in what sequence in order to achieve this?”

Process Modelling is, perhaps, the most widely misused and abused of business modelling techniques.

Information Flow

This is all about showing how information flows around the business and between the business and the outside world.

Procedure Modelling

This is a means of modelling HOW things OUGHT to be done in the business for maximum effectiveness. There are several other models that can be built as an when required but the models above will cover 100% of your needs 80% of the time.

John Owens

John J Owens – John is an inspirational business entrepreneur with a unique talent for seeing the simplicity and elegance underlying any enterprise – even if it is hidden …
Business process modelling